The danger in South Africa is that the fatal unrest witnessed at Lonmin’s
Marikana platinum mine last week spreads.

The pressure is mounting on president Jacob Zuma, already facing an election period, to isolate the problem and reassure not just voters, but also investors in the country, that the Lonmin crisis is a one-off.

That’s looking increasingly unlikely. Anglo American Platinum said today it has received higher wage demands from workers, while local miner Royal Bafokeng Platinum is also witnessing unrest.

The situation is made worse by rivalry between the National Union of Mineworkers and the new Association of Mineworkers and Construction Union, mixed up with a power struggle between rival factions within the ANC.

Mining is inexorably caught up in 300 years of colonial, and post-colonial, history and played a central part in the fight against apartheid. It’s politically charged and will take deft handling from president Zuma, which does not fill all parties with confidence.

At the same time, platinum mining is unusual in being heavily reliant on manual labour. Technology has failed to improve efficiency and has very limited applications. It’s a case of man with rock drill followed by man with shovel, leaving it ripe for political influence.

But workers are justified in feeling aggrieved. In the good times, mines became bloated. That persists and there are overheads that could still be eliminated to the benefit of workers. Mining companies should not assume that the solutions are purely political. They have a role, too, by tackling their own cost base and improving the lot of workers along the way.

Lending scheme may hit home buyers

Santander has increased the cost of home loans. This could be because it wants to make more money out of mortgages or because it wants to do less mortgage business. When regulators require higher capital reserves, lenders must decide where their remaining free capital is put to work. The economic choice may be to lend more to small businesses and less to home buyers, while their ability to do more of both is constrained by tighter capital adequacy rules.

The Bank of England’s Funding for Lending scheme helps on paper with cheap money, but it’s relatively small beer and will simply encourage lenders looking to maximise returns to pursue their chosen strategy, which may well be to turn down the dial on mortgages and turn it up for small firms.